Wheelz Enterprises, a car manufacturer, is a closely held corporation. Profits are taxed to the owners as ordinary income but not to the corporation as a unit. The owners have mutually agreed that their total number will never exceed 35 and that none of the shareholders can be a non-resident alien. In this scenario, Wheelz is an example of a(n) ________ corporation.

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Wheelz Enterprises is an example of a Subchapter S corporation. This is because it is a closely held corporation, meaning that it has a limited number of shareholders, and the profits are taxed to the owners as ordinary income rather than to the corporation as a unit. The requirement that none of the shareholders can be a non-resident alien also supports the classification as a Subchapter S corporation.

Wheelz Enterprises, a Car Manufacturer, Is a Closely Held Corporation